To focus on football is always to risk flippancy but even more so when people are banging down banks' doors in a bid to rescue their savings.

Still, football has significance, relatively minor of course, and the threat of economic disintegration in Cyprus could help achieve football unity on the island, ending more than half a century of bitter estrangement. "In terms of football I think [the economic problems] could definitely have a positive impact on reunification," says Hasan Sertoglu, president of the Cyprus Turkish Football Federation (CTFA).

Hasan has nothing to do with the Cyprus national team that will host Switzerland in a World Cup qualifier on Saturday. That team is run by the only Fifa-recognised body on the island, the Cyprus Football Association (CFA). But owing to historic negotiations that are reaching their climax, that team could be the last of its kind – and soon we may see a Cyprus national side that does not exclude players from the self-proclaimed Turkish Republic of Northern Cyprus, known to most of the world as Turkish-occupied northern Cyprus.

The CFA and the Cypriot First Division were founded in 1934 by eight clubs whose supporter base broadly reflected the ethnic composition of the then united island. Most of the clubs were for Cypriots with Greek heritage, some were mixed and one, Cetinkaya, was for Cypriots with Turkish heritage. They played together for over 20 years and at the time selection of the national team was commonly arranged to ensure proportionate representation from the Greek, Turkish and small Armenian community (for an account of that time, see this insideworldfootball.com piece).

However, political tension on the island soon overtook the team and the league. Divisions between the Greek and Turkish communities were enflamed by disputes over what should happen once British colonial rule ended, with most Greek Cypriots seeking not independence but "enosis" – unity with Greece, to which Turkish Cypriots were opposed. There was strife.

In 1955, given the apparent impossibility of Greeks and Turks playing peacefully with each other, the CTFA was formed and the unified league disbanded as Cetinkaya left to join the inaugural league for Turkish Cypriots.

After Cyprus gained independence in 1960, intercommunal violence increased. In 1974 a coup backed by the military ruler of Greece, Dimitrios Ioannides, installed a pro-enosis regime in the capital Nicosia. Turkey sent in troops – to protect Turkish Cypriots, they said; to mount an aggressive conquest, Greek Cypriots said. The Turkish army took control of about one third of the island, the northern part, and many Greek Cypriots were evicted. Many Turkish Cypriots left the south for the north. There was fury and bloodshed. Under international pressure a ceasefire was agreed but no solution. The island remains divided today along the battle lines of 1974. Turkish Cypriots and settlers from Turkey proclaimed the Turkish Republic of Northern Cyprus (TRNC) in 1983 but it was recognised by no one in the international community other than Turkey.

At this point Fifa, who had provisionally given the CTFA a sort of semi-recognition by allowing Turkish Cypriot clubs to compete in international friendlies but not official competition, cast Turkish Cypriot football into total wilderness.

Since 1983, then, northern Cyprus, which now has a population of around a quarter of a million, have been allowed to play with no one except other outcasts. They won the 2006 Fifi Wild Cup – a tournament organised for countries not recognised by Fifa – beating Greenland, Zanzibar and Gibraltar, but that was no antidote to their sense of isolation. The best chance of any player of Turkish Cypriot origin competing in a conventional tournament was to be selected for Turkey, as was Colin Kazim-Richards. He had the benefit of going through the English football system, which is a world above the forlorn Turkish Cypriot scene, where standards and infrastructure among the three divisions and 48 teams are too low for players to fulfil their potential. "Our isolation means we just turn in circles," says Hasan. "There is no future for our young players, nothing to motivate them."

Greek Cypriots abolished their economic blockade of the north prior to joining the European Union in 2004, allowing trade between the two parts to resume. But official relations remain embittered. Not until 2007 were there moves towards a football rapprochement as all eight founding clubs of the CFA, including Cetinkaya, whose original ground in Nicosia fell within what became a UN buffer zone, were invited to the opening of the association's new headquarters in the capital. That reunion gave rise to informal talk about bridging the football divide. But ultimately, in 2009, the government in the north forbade the CTFA from signing an agreement, for fear that any football concessions made could be taken as a political precedent.

Late last year, however, the football authorities on both sides reignited the process and this January brought a hugely symbolic event when the CFA president, Costakis Koutsokoumnis, agreed to negotiate not in a hotel or some neutral hideaway but in the CTFA's offices.

The negotiations were fruitful, with both sides announcing that the way had been paved for football reunification. The two parties agreed to finalise the details in March at Fifa's headquarters in Switzerland.

That meeting has been postponed "but only temporarily because of hectic schedules," insists Hasan. "It will probably take place in April. There has been positive movement on both sides and there are no longer any obstacles. The agreement will happen. This is not about politics, it is about the football family coming together. In the past the politicians were scared but now it's not like that and they can see the people support this for football."

The extent of popular support for the move remains to be seen. Hasan and Koutsokoumnis have both taken big risks, especially the latter. The CFA president is aware that some members of his association consider it nigh-on treasonous to consider welcoming Turkish Cypriot clubs back into the CFA fold. Anthorosis Famagusta, for instance, is a Greek Cypriot club that was displaced from Famagusta in the north and is now based in Larnaca. Most of its supporters vehemently oppose football reunification without a just political settlement. "I can't see reunification happening," says Leo Leonidu, sports editor of the Cyprus Mail. "Supporters of most Cypriot clubs are very nationalistic and I can't see them welcoming players and clubs from the north."

However, Koutsokoumnis, who is himself from a family that was forced to flee the north and can recall the days of harmonious cohabitation, appears to agree with Hasan that most people on the island are ready to watch footballers from both sides play together. Hasan thinks that the current economic woes will at least help convince folks that now would be a good time to give the world a positive story about Cyprus and provide the country with a wider pool of footballing talent to draw on.